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According to a survey conducted earlier this month, more than half of businesses based in the United Arab Emirates do not have an implementation strategy in place for the forthcoming introduction of VAT in the territory from January 2018.
The poll was conducted by recruitment firm Hays, which questioned more than 100 "senior decision-makers and finance professionals" from both the private and public sectors on their VAT implementation strategies and budget allocations.
According to the survey, 52 percent of those questioned between February and April 2017 said they did not have an implementation strategy in place, while 60 percent had not allocated an additional budget to dealing with the transition, opting instead to implement changes using existing employees and resources.
Larger organizations were found to be more likely to have a plan in place, with 73 percent of businesses questioned with more than 1,500 staff stating that they have a strategy, seven percent retaining a budget of over AED100,000 (USD27,224) for implementation, and over half (53 percent) anticipating hiring non-finance staff. This compares with 42 percent, 3 percent, and 23 percent, respectively, for smaller organizations (those employing fewer than 250 staff).
Commenting on this finding, Chris Greaves, Managing Director of Hays Gulf Region, observed that:"This correlation is not overly surprising for two reasons. Firstly, the larger organizations, typically multi-national companies, are well practiced in the processes and procedures around VAT, having implemented practices and paid it in other geographical locations. They are therefore at an advantage for implementing here in the UAE and can better anticipate the level of expertise, budget and planning required."
He added: "The second reason is that the Ministry of Finance has announced that some small businesses will be safeguarded from VAT for this initial phase. However, which organizations will fall into this threshold is so far unknown. What is clear, is that no organization is completely exempt from the effects of this new era of change.
The poll was conducted by recruitment firm Hays, which questioned more than 100 "senior decision-makers and finance professionals" from both the private and public sectors on their VAT implementation strategies and budget allocations.
According to the survey, 52 percent of those questioned between February and April 2017 said they did not have an implementation strategy in place, while 60 percent had not allocated an additional budget to dealing with the transition, opting instead to implement changes using existing employees and resources.
Larger organizations were found to be more likely to have a plan in place, with 73 percent of businesses questioned with more than 1,500 staff stating that they have a strategy, seven percent retaining a budget of over AED100,000 (USD27,224) for implementation, and over half (53 percent) anticipating hiring non-finance staff. This compares with 42 percent, 3 percent, and 23 percent, respectively, for smaller organizations (those employing fewer than 250 staff).
Commenting on this finding, Chris Greaves, Managing Director of Hays Gulf Region, observed that:"This correlation is not overly surprising for two reasons. Firstly, the larger organizations, typically multi-national companies, are well practiced in the processes and procedures around VAT, having implemented practices and paid it in other geographical locations. They are therefore at an advantage for implementing here in the UAE and can better anticipate the level of expertise, budget and planning required."
He added: "The second reason is that the Ministry of Finance has announced that some small businesses will be safeguarded from VAT for this initial phase. However, which organizations will fall into this threshold is so far unknown. What is clear, is that no organization is completely exempt from the effects of this new era of change.